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How CMOs Can Gain More Influence in the C-Suite

Advice for marketing leaders as CMOs are ‘facing an existential crisis’.

Wilton & Bain partner Erin Callaghan shares her insight as a talent recruiter and advisor on the changing role of the CMO.

The demand for marketing to be churned out faster, better and cheaper is taking a greater toll on chief marketing officers pressured by their CEOs and chief financial officers to deliver results in ever-shorter time frames. Stoked by the rise in performance marketing, the role of the CMO is slipping further into jeopardy as the disconnect between these executives and the rest of the C-suite has never been greater.

A McKinsey survey, done last year in partnership with the Association of National Advertisers, found the disconnect between marketers and their CEOs to be at an all-time high. When CMOs and CEOs were asked about their top marketing metrics, the two groups agreed only half the time—with CEOs focused on year-over-year revenue growth and margin improvements and CMOs focused on metrics such as brand awareness and recognition. The survey was based on conversations with more than 100 people in C-level growth roles, including CMOs and chief growth officers, and 21 CEOs. It also found that the CMO’s primary role is being confused as companies add new executives including chief digital and growth officers, who are also taking on customer-related duties.

This misalignment was cited as a top concern for CMOs heading into 2024. Nearly one year since the McKinsey study, it doesn’t seem like the disconnect has improved and marketers are left wondering if it ever will, according to CMOs and other experts Ad Age interviewed for this story.

“The CMO is facing an existential crisis,” said Esther Mireya Tejeda, who became the first CMO of Anywhere Real Estate in 2022 and was an Ad Age 2024 Leading Woman. She is currently transitioning out of the company to start her own consultancy, EM Strategic Partners, where she will be chief marketing and growth strategist and help marketers navigate these challenges to gain more influence in the C-suite.

“The existence of marketing as the driver of value, growth, customer understanding and insight—that has been redefined in many ways. In a lot of ways, that scope has changed and contracted to performance and sales enablement, which is to the detriment of any enterprise, and marketing as a function,” Tejeda said.

CMO article

How the marketing function has changed

Although most people interviewed for this story said they don’t see a future where the CMO role completely goes away, they said the job is changing and that a lot of companies are hiring chief growth officers and chief digital officers, who have more responsibilities tied to sales and performance, rather than chief marketers. This is being driven in part by the fact that most Fortune 250 CEOs (70%) have financial or operational backgrounds versus marketing backgrounds (only 10%), per the McKinsey survey.

The industry has already seen major companies cutting the CMO role. To name a few within the last year: United Parcel Service got rid of its CMO; Walgreens cut its CMO as part of layoffs; and Etsy laid off its CMO and merged those responsibilities under operations, eventually replacing its CMO with Chief Brand Officer Brad Minor. To be sure, companies for years have gone through periods where they will eliminate the CMO role only to bring it back a few years later.

“The CMO role is being subsumed into something else,” said Erin Callaghan, a partner at Wilton & Bain, a firm that provides services in executive search, interim management, specialist hires and leadership advisory. 

“So, you might see that marketing now sits under a chief growth officer and that’s about sales strategy and marketing. And there’s this really interesting self-fulfilling prophecy where the CEO doesn’t always understand the levers that marketing is using. A really successful CMO has to be ridiculously data-driven and demonstrate ROI, which is often very difficult … If the CMO’s role is being absorbed into another function, they don’t have a seat at the top table and they can’t influence. They’re not part of the strategy,” Callaghan said, reflecting on what she is seeing in the industry as a talent recruiter and advisor.

Marketers are left feeling like there are too many blurred lines between their roles and other departments—the McKinsey survey found that nine out of 10 CEOs feel that the marketing role is clearly defined at their companies, while only 22% of CMOs said their jobs were well-defined and understood by other C-suite executives.

“The remit now of marketing is so expansive,” said Wendy Clark, president of Consello, “from data and performance, to distribution, to technology, to AI and its impacts, commerce, marketplace, loyalty,” to name a few. With “the broadening of all the ways that companies and brands interact with consumers, through demonstration and partnerships and sponsorships and collabs, there are so many touch points now that it becomes more complicated … to track and measure, because you’ve got more going on. And [it’s] probably even harder to have a sense of control over.”

These new responsibilities can present an opportunity for CMOs, but they also muddy the marketing function.

“The people that are supposed to be aligned for the greater good of the company all have different expectations of what the marketing function does and how it impacts their business,” said Nick Primola, executive VP at the ANA, who runs its CMO practice. “That’s a problem and we’ve been looking to address that problem.”

CMOs themselves don’t even always agree on what marketing KPIs, or key performance indicators, are the most important, Primola added.

He said when helping conduct the McKinsey survey, the ANA gathered about 12 top CMOs in a room to determine which KPIs marketers should prioritize and it took seven months to get a list of between 75 and 100 down to just five. “These were some of the most heated conversations amongst peers, who actually did the same things for a living and actually liked each other,” he said. “The disagreement or the lack of obvious answers when presented with that question was fascinating and also concerning.” 

Over-emphasis on performance

Some CMOs told Ad Age they feel too much focus has been placed on performance marketing. Pressured by inflation and other economic woes, companies are placing much more emphasis on any advertising that drives strong returns on investment and can be tied directly to revenue gains.

“The label of performance marketing has been extremely detrimental,” Tejeda said. “It implies that every other form of marketing is not performing. What we’ve created is this dichotomy: There is performance marketing and all the other marketing is where you go to waste money.”

She said campaigns aimed at driving brand awareness, for example, are just as important to advertising as those with direct sales goals; they all contribute to the overall, long-term health of the company.

“The disconnect for me is not just with the CEO, it’s the whole organization,” said Maria Garrido, CMO of online music streamer Deezer. “I’m sitting in a company that is very tech-driven. In the past, a lot of the work was a balance between short-term results and investing in the future of the brand. Now everyone’s focus is on the short term.”

Deezer just brought on a new CEO, Alexis Lanternier, at the beginning of September after its deputy CFO, Carl de Place, took over as CFO in August. They declined to comment, being new to the roles. Garrido said she has often received questions from past CFOs about how many leads she got from a campaign that had just launched. “That’s like asking, ‘Oh you went on a date with that person one time, why aren’t you married?’”

The issue over this disconnect that sometimes exists between marketing and financial leaders bubbled up when Solo Stove paused its partnership with Snoop Dogg shortly after a viral campaign late last year starring the rapper drove a big brand awareness boost but did not result in an immediate sales impact. Solo Stove maker Solo Brands’ former CEO, John Merris, left the company shortly after the first campaign, with its interim CFO stating in a press release at the time that while “Giving Up Smoke” had raised awareness, “it did not lead to the sales lift that we had planned.”

Some in the industry lamented that decision as an attack on creativity.

Solo Brands has since done an about-face. It named a new CEO and president, Christopher Metz, in January and brought in a new CFO, Laura Coffey; a chief growth officer of Solo Brands and president of Solo Stove, Michael McGoohan; and a new CMO, Luana Bumachar, in February. Then, in August, it reignited its partnership with Snoop (a recent spot below). Bumachar last month said the brand was “misunderstood” in that original press release. 

“It drove huge awareness but also purchase consideration across every retail channel. Search exploded. And we had a 20% increase in firepit sales—it was our four best weeks of the year,” Bumachar told Ad Age in August.  

Solo Stove and The Martin Agency, the shop behind the Snoop Dogg ads, declined comment for this story.

Garrido said gone are the days of marketers being able to have a discussion on how to generate the “brand love of Coca-Cola”—instead, they’re having to sell a creative idea to a financial team that is trying to pick it apart with A/B testing and endless data points on a spreadsheet that might bring up the slight possibility of that idea not working.

“The pendulum has always been on the art side, but we have so much data now we are forgetting about the art,” Garrido said. “I’m hoping it starts to come down the middle.”

Deezer is trying to establish itself as a challenger to big music streaming platforms such as Spotify and Apple Music through “bold, fresh and quirky” creative that emphasizes the experience listeners get while using its service (a recent spot below), she said.

What this hyper focus on performance marketing will do to brands and their ability to build longevity and customer loyalty is up in the air. But it could end up being a boon to ad agencies, Callaghan suggested.

“It’s a really good question; I don’t know how that plays out,” she said. “But I wonder whether there will be a bigger reliance on agencies in the future, because if you don’t have some of that expertise in-house and you’ve slimmed down your marketing function, then maybe there will be a much bigger resurgence in terms of using agencies for doing the creative work.”

Advice for CMOs

Most people interviewed for this story said CMOs need to understand where their CEOs and CFOs are coming from before they can improve that relationship and gain more influence in the C-suite.

Garrido said as much as she can get frustrated by the disconnect, she always refers back to a philosophy she picked up when working for ad agencies such as Havas in the earlier part of her career, which is to always “have business empathy” for the clients.

“I try to apply that on the client side,” she said. “There is so much more going on. What are my CFO’s challenges?”

Garrido said she often speaks to CFOs, who are more commonly data guys, in their language. “I try to frame it in a way that makes sense” for them, she said, adding that part of her job internally has been selling marketing which, really, is something all CMOs should be good at doing.

Clark, who spoke from experience having to fight for budget when she was a marketing executive for major brands including Coca-Cola and AT&T, said CMOs have to get comfortable with speaking “the operational and commercial language” of the company and backing up their marketing investment with as much data and research as possible.

“I’m the first person to say brand, advertising and investment absolutely is accountable to your bottom line,” she said. “There’s plenty of empirical data and evidence out there. Say, ‘look, it’s important to me that you don’t think I would ever have anything but the best possible outcomes in mind for the company. So, here’s based on this body of evidence, this is why we are making these decisions and these investments.’ If you let it become this game of love—be collaborative, educate, use case studies and examples—you can help create your rationale for everything that you’re doing.”

Primola said the ANA has been working with CMOs to help them talk about how their role can impact the company.

“Moving from campaign to company,” he said. “It sounds cliche, but it is really a reflection of where marketing is as an experience function: Helping the entire organization from a business standpoint generate value and growth. We can’t overlook the social or cultural impact that marketing can help the company have. Marketing has the responsibility to help the company be smarter about its consumers.”

As the McKinsey survey pointed out, it’s a huge opportunity for companies to invest in marketing, “given CEOs who place marketing at the core of their growth strategy are twice as likely to have greater than 5% annual growth compared with their peers.”

Especially when the “economy is soft,” these relationships need to work better, Callaghan said. “If finance and marketing aren’t in step, and if marketing can’t give finance the data they want, then you’re not getting the budget that you need and you absolutely won’t.”

Please see the full article here.

If you would like to connect with Erin Callaghan about this article, please get in touch here.

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